Signs Bookings of $207 Million in the Fourth Quarter and $600 Million in 2018, Up 36 Percent over the Prior Year

Provides Outlook for Full Year 2019 Revenue, Operating Income, and Adjusted EBITDA

Estimates Organic Revenue Growth between 7.5 and 8.6 Percent

Full Year 2018

Revenue was a record $1.509 Billion ($1.501 Billion Non-GAAP AHFS/WD)

Operating Income was $92.1 Million or 6.1 Percent of Revenue ($106.1 Million or 7.1 Percent Non-GAAP AHFS/WD)

Adjusted EBITDA was $188.7 Million or 12.5 Percent of Revenue

Fully Diluted EPS was $0.77 ($1.49 Non-GAAP)

Fourth Quarter 2018

Revenue was $419.1 Million ($418.9 Million Non-GAAP AHFS/WD)

Operating Income was $39.0 Million or 9.3 Percent of Revenue ($46.0 Million or 11.0 Percent Non-GAAP AHFS/WD)

Adjusted EBITDA was $64.0 Million or 15.3 Percent of Revenue

Fully Diluted EPS was $0.44 ($0.63 Non-GAAP)

DENVER, March 6, 2019 /PRNewswire/ -- TTEC Holdings, Inc. (NASDAQ: TTEC), a leading global customer experience technology and services company focused on the design, implementation and delivery of transformative solutions for many of the world's most iconic and disruptive brands, today announced financial results for the fourth quarter and full year ended December 31, 2018.

"TTEC achieved many significant milestones in 2018. Most noteworthy, the company reported unprecedented sales bookings reaching the $600 million mark, and record revenue of one and a half billion dollars. These milestones demonstrate our differentiation as a customer experience technology and services partner, focused on the design, implementation and delivery of solutions that transform the engagement between our clients and their customers. Our digital-rich offerings are resonating with existing and new clients, including many disruptive, hypergrowth businesses," commented Ken Tuchman, TTEC's chairman and chief executive officer."

Tuchman continued, "We are particularly pleased to see the demand for our enterprise-scale, SaaS-based, omnichannel cloud solutions. Today, we continue to increase the number of subscription-based cloud contact center licenses supporting many of the world's most noteworthy enterprises and government agencies. Looking at 2019, we anticipate meaningful organic revenue growth in both our TTEC Digital and TTEC Engage businesses."

FULL YEAR 2018 FINANCIAL HIGHLIGHTS

Revenue

Full year 2018 GAAP revenue increased 2.2 percent to a record $1.509 billion compared to $1.477 billion for full year 2017.

ASC 606 and foreign exchange had a net $9.0 million positive and $8.0 million negative impact, respectively, on revenue in full year 2018.

Income from Operations

Full year 2018 GAAP income from operations was $92.1 million, or 6.1 percent of revenue, compared to $100.5 million, or 6.8 percent of revenue for full year 2017.

Non-GAAP AHFS/WD income from operations, excluding $12.7 million in restructuring and one-time items, was $106.1 million or 7.1 percent of adjusted revenue versus 8.4 percent for full year 2017.

ASC 606 and foreign exchange had a net $4.4 million and $6.1 million positive impact, respectively, on income from operations in full year 2018.

Adjusted EBITDA

Full year 2018 Non-GAAP Adjusted EBITDA was $188.7 million, or 12.5 percent of revenue, compared to $200.4 million, or 13.6 percent of revenue for full year 2017.

ASC 606 and foreign exchange had a net $4.4 million and $5.2 million positive impact, respectively, on Adjusted EBITDA in full year 2018.

Earnings Per Share

Full year 2018 GAAP fully diluted earnings per share attributable to TTEC shareholders was $0.77 compared to $0.16 for full year 2017.

Non-GAAP fully diluted earnings per share was $1.49 compared to $1.88 for full year 2017.

ASC 606 and foreign exchange had a net $0.07 and $0.10 positive impact, respectively, on earnings per share in full year 2018.

Bookings

During the full year 2018, TTEC signed an estimated $600 million in annualized contract value from new and expanded client relationships.

FOURTH QUARTER 2018 FINANCIAL HIGHLIGHTS

Revenue

Fourth quarter 2018 GAAP revenue decreased 1.8 percent to $419.1 million compared to $426.6 million in the prior year period.

Non-GAAP AHFS/WD revenue decreased 1.0 percent to $418.9 million compared to the prior year period.

ASC 606 and foreign exchange had a net $4.2 million positive and $5.4 million negative impact, respectively, on revenue in fourth quarter 2018.

Income from Operations

Fourth quarter 2018 GAAP income from operations was $39.0 million, or 9.3 percent of revenue, compared to $36.6 million, or 8.6 percent of revenue in the prior year period.

Non-GAAP AHFS/WD income from operations, excluding $7.0 million in restructuring and one-time items, was $46.0 million or 11.0 percent of adjusted revenue versus 11.2 percent for the prior year period.

ASC 606 and foreign exchange had a net $0.5 million and $1.2 million positive impact, respectively, on income from operations in fourth quarter 2018.

Adjusted EBITDA

Fourth quarter 2018 Non-GAAP Adjusted EBITDA was $64.0 million, or 15.3 percent of revenue, compared to $67.8 million, or 15.9 percent of revenue in the prior year period.

ASC 606 and foreign exchange had a net $0.5 million and $0.8 million positive impact, respectively, on adjusted EBITDA in fourth quarter 2018.

Earnings Per Share

Fourth quarter 2018 GAAP fully diluted earnings per share attributable to TTEC shareholders was $0.44 compared to a loss of $0.89 for the same period last year.

Non-GAAP fully diluted earnings per share was $0.63 compared to $0.69 in the prior year period.

ASC 606 and foreign exchange had a $0.01 and $0.02 positive impact, respectively on earnings per share in fourth quarter 2018.

Bookings

During the fourth quarter 2018, TTEC signed an estimated $207 million in annualized contract value. The fourth quarter bookings mix was diversified across segments, verticals, and geographies.

As of December 31, 2018, TTEC had cash and cash equivalents of $78.2 million and debt of $304.5 million, resulting in a net debt position of $226.3 million. This compares to a net debt position of $286.9 million for the same period 2017.

As of December 31, 2018, TTEC had approximately $360 million of additional borrowing capacity available under its revolving credit facility compared to $350 million for the same period 2017.

Cash flow from operations in the fourth quarter 2018 was $2.2 million compared to a negative ($36.5) million for the fourth quarter 2017. For the full year, cash flow from operations was $168.3 million compared to $113.2 million for the same period 2017.

Capital expenditures in the fourth quarter 2018 were $11.6 million compared to $8.0 million for the fourth quarter 2017. For the full year 2018, capital expenditures were $43.5 million compared to $52.0 million for the same period 2017.

Paid a 28 cent per share, or $12.9 million, semi-annual dividend on October 19, 2018, a 12 percent increase over the distribution paid in October of the prior year. In February 2019, the Board declared the next semi-annual dividend of 30 cents per share, payable on April 18, 2019 to shareholders of record on March 28, 2019. This represents a 7.1 percent increase over the most recent distribution in October 2018 and an 11.1 percent increase over the distribution paid in April 2018.

CSS fourth quarter 2018 GAAP revenue increased 1.6 percent to $18.3 million from $18.0 million for the year ago quarter. Income from operations was $3.0 million or 16.5 percent of revenue compared to an operating loss $0.3 million or negative 1.7 percent of revenue for the prior year period.

Non-GAAP AHFS/WD revenue increased 7.3 percent to $16.6 million over the year ago period and income from operations was $3.2 million or 19.0 percent of adjusted revenue. This compares to operating income of $1.8 million or 11.5 percent of revenue in the prior year period.

Customer Technology Services (CTS) – Cloud and Managed Technology

CTS fourth quarter 2018 GAAP revenue increased 52.8 percent to $51.2 million compared to $33.5 million for the year ago quarter. Income from operations was $9.4 million or 18.4 percent of revenue compared to $1.0 million or 3.0 percent of revenue in the prior year period.

Non-GAAP AHFS/WD revenue increased 52.8 percent to $51.2 million over the year ago period and income from operations was $9.7 million or 18.9 percent of revenue. This compares to $4.4 million or 13.0 percent of adjusted revenue in the prior year.

Customer Growth Services (CGS) – Digitally-Enabled Revenue Growth

CGS fourth quarter 2018 GAAP revenue increased 18.7 percent to $37.7 million compared to $31.8 million for the year ago quarter. Income from operations was $2.9 million or 7.8 percent of revenue compared to $1.5 million or 4.7 percent of revenue in the prior year period.

Non-GAAP AHFS/WD revenue increased 22.2 percent to $37.7 million in the year ago period and income from operations was $4.3 million or 11.4 percent of revenue. This compares to $2.1 million or 6.9 percent of adjusted revenue in the prior year period.

Customer Management Services (CMS) – Customer Experience Delivery

CMS fourth quarter 2018 GAAP revenue decreased 9.2 percent to $311.8 million compared to $343.3 million for the year ago quarter. Income from operations was $23.5 million or 7.5 percent of revenue compared to $34.4 million or 10.0 percent of revenue in the prior year period.

Non-GAAP revenue decreased 8.7 percent to $313.3 million in the year ago period and income from operations was $28.9 million or 9.2 percent of adjusted revenue. This compares to $39.2 million or 11.4 percent of revenue in the prior year period.

ASC 606 had a net $4.2 million and $0.5 million positive impact on revenue and income from operations, respectively.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these non-GAAP financial measures can be found in the tables accompanying this press release.

GAAP metrics are presented in accordance with Generally Accepted Accounting Principles, including the impact from TTEC'sJanuary 1, 2018 adoption of Accounting Standards Codification (ASC) 606 "Revenue from Contracts with Customers" using the modified retrospective method.

Non-GAAP AHFS/WD (assets held for sale and wind-down) - As reflected in the attached reconciliation table, the definition of Non-GAAP AHFS/WD excludes from revenue and operating income (i) assets held for sale and wind-down, (ii) impairment, restructuring and integration charges, and (iii) one-time extraordinary items.

"The global market demand for digital transformation is accelerating as companies realize the urgency and importance that personalized and frictionless customer experiences have in building brand loyalty and value," commented Regina Paolillo, chief financial and administrative officer. "We are well positioned to capitalize on these market dynamics. Our differentiated solutions are delivering the customer experiences that our clients and their digital-savvy customers expect. The current scale and composition of our bookings and revenue demonstrates the markets' growing need for our digital and analytic-rich offerings."

Capital Expenditures – Capital expenditures between 3.8 and 4.0 percent of revenue, of which approximately 70 percent is growth oriented.

We estimate that 47 percent of the revenue, 38 percent of the operating income, and 43 percent of the adjusted EBITDA will be recognized in the first half of the year.

On a full year 2019 basis, we estimate each of the segments to contribute revenue, operating income, adjusted EBITDA as follows:

CSS revenue growth between 1.3 and 4.0 percent, operating income margin between 8.1 and 9.5 percent, and adjusted EBITDA margin between 12.6 and 13.8 percent.

CTS revenue growth between 42.2 and 43.4 percent, operating income margin between 13.9 and 14.3 percent, and adjusted EBITDA margin between 19.3 and 19.7 percent.

CGS revenue growth between 4.1 and 5.4 percent, operating income margin between 8.4 and 8.6 percent, and adjusted EBITDA margin between 10.3 and 10.6 percent.

CMS revenue growth between 3.0 and 4.0 percent, operating income margin between 5.8 and 6.0 percent, and adjusted EBITDA margin between 11.4 and 11.6 percent.

About TTEC

TTEC Holdings, Inc. (NASDAQ: TTEC) is a leading global customer experience technology and services company focused on the design, implementation and delivery of transformative customer experience for many of the world's most iconic and disruptive brands. The Company delivers outcome-based customer engagement solutions through TTEC Digital, its digital consultancy that designs and builds human centric, tech-enabled, insight-driven customer experience solutions for clients and TTEC Engage, its delivery center of excellence, that operates customer acquisition, care, fraud prevention and detection, and content moderation services. Founded in 1982, the Company's 52,400 employees operate on six continents across the globe and live by a set of customer-focused values that guide relationships with clients, their customers, and each other. To learn more about how TTEC is bringing humanity to the customer experience, visit www.ttec.com.

NON-GAAP FINANCIAL MEASURES

This press release contains a discussion of certain non-GAAP financial measures that the Company includes to allow investors and analysts to measure, analyze and compare its financial condition and results of operations in a meaningful and consistent manner. A reconciliation of these non-GAAP financial measures can be found in the tables accompanying this press release.

FORWARD-LOOKING STATEMENTS

This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TTEC Holding, Inc.'s management and are subject to significant risks and uncertainties. Specifically, we would like for you to focus on risks related to our strategy execution, our ability to innovate and introduce technologies that are sufficiently disruptive to allow us to maintain and grow our market share, cybersecurity risk and risks inherent to our equity structure. Actual results may differ from what is expressed in the forward-looking statements. Factors that could cause TTEC's results to differ materially from those described in the forward-looking statements can be found in TTEC's Annual Report on Form 10-K for the year ended December 31, 2018, which has been filed with the U.S. Securities and Exchange Commission (the "SEC") and is available on TTEC's website www.ttec.com, and on the SEC's public website at www.sec.gov. TTEC Holdings, Inc. does not undertake to update any forward-looking statements.